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Alberta's Heritage savings fund could increase in value by more than $6B to $28B by 2026

Alberta Legislature
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The future of Alberta's Heritage Savings Trust Fund was up for a discussion at an annual meeting Thursday for the billions in rainy-day deposits.

Several Albertans attended the meeting, where they got the chance to weigh in on it and ask or submit questions.

"Why is there not more money being contributed from non-renewable resources?" one person in attendance asked.

That was the initial purpose of the fund. It was set up in 1976 under Peter Lougheed's Progressive Conservative government, with 30 per cent of Alberta resource revenues going into savings. In the late 1980s, oil crashed, and that money was used to balance budgets.

"People criticized it at the time, but they also didn’t want to pay higher taxes, so this was the compromise that was struck," Lori Williams, a political scientist at Calgary's Mount Royal University, told CTV News Edmonton on Friday.

Critics argue governments used the cash as a slush fund and say revenues should be much higher.

Comparisons are often made to similar savings plans, such as Norway's sovereign wealth fund or the Alaska Permanent Fund, which boast $1.2 trillion and $72 billion, respectively. Alberta's fund sits at $21.4 billion.

"If we had stayed at that 30 per cent today, we would have over $60 billion in that fund," Williams said.

Changes were made to the fund last March, requiring the finance minister to decide if money should be withdrawn.

The new rule means $1.5 billion of net income will stay in the fund this year. The province forecasts savings could grow to $28 billion by 2026.

Williams says without a legislative commitment, the change falls short.

"Whatever commitments or promises government made in sunnier times, they tend to go by the wayside when the economy and polls go down," she said.

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